What if I convert and then need to withdraw money from my Roth within the first five years?

If you withdraw converted amounts within five years and are under
age 59&frac12 at that time, you'll owe a 10% penalty tax on the amount withdrawn¹ - no worse than if you had taken the money out of your original IRA. Withdrawals
after age 59&frac12 are exempt from the penalty no matter when you converted. Once
five tax years have passed, starting with the year of conversion, you can withdraw
conversion money (but not earnings) without penalty regardless of age.

Example 1: Tom, age 40, converts a $40,000 deductible
IRA into a Roth. He'll owe income tax on the converted amount, but no 10%
penalty. If he withdraws $5,000 the next year, he'll have to pay a $500 penalty.

Example 2: Joan, age 59, converts a $40,000 deductible
IRA into a Roth. She'll owe income tax on the converted amount, but no 10%
penalty. If she withdraws $5,000 the next year, her withdrawal is exempt from
the penalty because she is age 60.

Example 3: Carol, age 30, converts a $40,000 deductible
IRA into a Roth. She'll owe income tax on the converted amount, but no 10%
penalty. If she withdraws $5,000 five years later, her withdrawal is exempt
from the penalty even though she is only 35 years old because five years have
passed since the conversion.

If I take money out of my Roth, can I decide whether to withdraw contributions, conversion money or earnings?

No. Specific rules establish the type of money you'll receive.
Regular Roth contributions (if you've made any) always come out first, then
converted amounts (starting with the oldest conversion first) and then earnings.
All Roth accounts are treated as a single Roth, so you can't avoid the ordering
sequence by setting up separate accounts.

I know I can withdraw earnings from my Roth tax-free after five years if I meet certain requirements. Does
the five-year period restart for each contribution or conversion I make?

No. All Roth money has a single five-year clock that begins with
the tax year of your first contribution or conversion to any Roth account.
Once this five-year period ends, any earnings you withdraw are considered to
have met the five-year requirement. So if your first Roth contribution or conversion
was for the 2010 tax year, you'll never have to think about the five-year requirement
again after 2014.

The 10% penalty does not apply to withdrawal of any converted amount that
was not taxable upon conversion (i.e., prior nondeductible contributions).
In other words, you only pay a penalty on converted money if it would have
been subject to a penalty upon withdrawal from the original IRA.

This material is not intended to replace the advice of a qualified attorney, tax advisor, investment professional, or insurance agent. Before making any financial commitment regarding the issues discussed here, consult with the appropriate professional advisor.

Before investing, consider the product's investment objectives, risks, charges and expenses. Contact your advisor or Pioneer Investments for a prospectus or summary prospectus containing this information. Read it carefully. To obtain a free prospectus or summary prospectus and for information on any Pioneer fund, please download it here.